It’s almost wedding season in North America and Europe, the time of the year when brides and grooms pray for good weather and promise to love each other for the rest of their days. This optimistic bunch obviously aren’t paying attention to the divorce statistics. But people with family businesses should.

In the UK, the US and about 10 other countries worldwide, there are now half as many divorces as marriages each year. In India, the divorce rate has doubled in the last five years. Perhaps most startling is that the average American woman now “will have more husbands than children”, says family business consultant Peter Leach. No matter how much people think they love each other, there is a good chance their marriage isn’t for life.

Unsurprisingly, such a massive event as a separation can have a huge effect on a family business. “Divorce can badly affect a family business for all sorts of reasons,” says Sarah Higgins, head of the family team at UK-based law firm Charles Russell. “On a practical level, if the shareholder is working in the company, but is upset or distracted by divorce proceedings, then the business may suffer.” Then there is the financial impact. “Shareholdings may have to be sold or borrowing taken out in order to fund a settlement. This may trigger tax,” says Higgins. “If both spouses are involved in the business, then a decision has to be made as to whether one of them will carry on with the business, whether it will be sold, or whether they are going to try to keep their involvement.”

There are plenty of examples of acrimonious divorces in the family business sector. Take the Gucci family, where the divorce of Maurizio Gucci and Patrizia Reggiani (pictured) ended in murder. Reggiani called her 1994 divorce settlement a “plate of lentils”. The following year, her ex-husband was gunned down outside his Milan office. Reggiani was arrested for hiring the hitman and sentenced to 26 years in prison.

Then there is News Corp, which it could be argued is still feeling the effects of Rupert Murdoch’s divorce from Anna, his wife of more than 30 years and mother of three of his children. She had sat on the company’s board, but was eventually forced out after the split.

Murdoch, meanwhile, married Wendi Deng, one of his employees, just 17 days after the divorce came through. He went on to have two more children, leading to concerns about how the family’s controlling stake in the media empire would be divided. By 2005, amid discussions about the trust that holds the controlling share, Murdoch’s eldest son Lachlan resigned as deputy chief operating officer. The role was later filled by his brother James, who until recently also headed News International – News Corp’s British division – which stands accused of phone hacking.

Meanwhile, the messy divorce of Robert Pritzker, which later saw his children file a lawsuit against him claiming he and family members drained their trust funds of over $1 billion (€759 million), was ultimately responsible for the break-up of the Pritzker family’s empire, including the floatation of some of the family’s businesses, such as the Hyatt hotel chain, and the sale of others.

Of course, there are many businesses that have dealt with divorce well. Roger Pedder, president of European Family Businesses and the former chairman of Clarks Shoes, says: “There have been several divorces in the Clark family among shareholders, even some big shareholders, but as the family and shareholding body is so large I can’t remember it causing a problem to the company.”

Its large number of shareholders could well be Clarks’ saving grace. “I suspect the effect is going to be much greater in smaller families where each member has a significant proportion of the shares depending on the degree to which they have been transferred to spouses,” says Pedder. Leach agrees: “Divorce where someone has a big shareholding in the business can bring the business down. It can be a very, very awkward and destabilising period.”

So what can family businesses do to proof themselves against the possible effects of a divorce? Other than banning family members from marrying (unlikely to be a popular request), there are a number of legal steps that can be taken, although not all will be upheld under local laws.

The obvious solution, says Jonathan West of City of London-based law firm Prolegal, is pre-nuptial agreements, which are valid in many countries, including France, Germany, Switzerland and Australia. In the US, pre-nups are governed by state law and in some states, like New York, they are “essentially bullet proof if you follow the proper steps”, says Mark Haranzo, a US-based partner at Withers, specialising in asset protection planning for wealthy families. Since 2010, when the pre-nuptial agreement of German family business heiress Katrin Radmacher (pictured) and her French ex-husband was upheld by the British Supreme Court, pre-nups have also been given legal weight in the UK. “Now, the courts are quite receptive to pre-nuptial agreements,” says West. But the Institute for Family Business, a British lobby group, wants the UK government to go even further – it is currently campaigning for pre-nups to become legally binding documents.

But there are a couple of things to remember. Even if pre-nups are recognised in a certain jurisdiction, a particular agreement might be overturned by the court if it is deemed to be unfair. “Invariably with a pre-nuptial agreement, the asset holder, whether that’s the man or the woman, is going to be trying to get themselves out of the situation for less than the court would order. But it still nevertheless has to be fair and make a fair provision, both in terms of capital and, if there are children, income as well,” says West.

People should also make a full disclosure, he says, warning that not doing so could lead to the court “to decide against you”. Clients “often don’t like the idea of full disclosure going into a marriage, but if you want to try and protect existing assets, then the best way to do so is to declare them”, he says.

And of course, the actual agreement needs to be valid, a lesson recently learnt by Frank McCourt, owner of the Los Angeles Dodgers. He had entered into a pre-nuptial agreement with his wife Jamie, but the problem was there were different versions – with one giving ownership of the Dodgers to McCourt and the other splitting it between the pair. When the couple broke up, the judge decided the pre-nups were invalid and the team is now being sold. “Rule number one is have an agreement, rule number two is make sure it is valid,” says Haranzo.

Pre-nups, says West, should also be reviewable and altered if circumstances change – for example, if a non-family spouse came in and worked in the business, helping it to grow. “If someone is adding benefit to a business, fairness may dictate that he or she should get some benefit from that,” he says.

One of the big difficulties, says David Lansky from the Family Business Consulting Group, is that families “don’t like dealing with pre-nuptial agreements”. This means they are often “not brought to the fore until shortly before a wedding”. In this case, he says, it can be harder to persuade somebody to sign, because there is a view that they have been coerced into doing so.

Having a policy in place that all family members have to sign a pre-nup can make it “more palatable for future spouses”, says Haranzo. This can be introduced in the shareholders’ agreement or in the company’s memorandum of articles of association. But these changes need to be made long before a wedding – “you don’t want a situation where the son is getting married and suddenly the family make amendments to force these changes, because the bride-to-be is going to take it personally”, says Haranzo.

It is also possible to make it “effectively forbidden to transfer shares outside of the family”, says West, through the shareholders’ agreement or the memorandum of articles of association. Somebody who divorced a family member therefore would forfeit their shares. “It doesn’t get around the problem wholly, because if [a former spouse] does not get a transfer of the value of shares, [they’re] going to get other assets,” he adds. But the shareholdings will be protected.

Trusts are another option, says West. “If there is going to be some sort of challenge, it is much harder to challenge a trust, particularly a discretionary trust where the party receiving the income has no direct control.” Adding a provision, says Haranzo, that any distribution of assets can be withheld for a valid reason, “including the fact that the beneficiary does not have a pre-nuptial agreement”, is useful. In Germany, says Dr Joerg Luettge, a partner at FGS Flick Gocke Schaumburg, “many articles of incorporation or partnership agreements state that every shareholder or partner is obliged to enter into a pre-nuptial agreement”.

“I like the belt and suspenders approach,” says Haranzo. There are a handful of US states that have asset protection rules, such as Delaware, Alaska, Nevada and South Dakota. Putting the business interest in a trust in one of these states before marriage should mean it’s not subject to creditors’ claims. “Oftentimes, a father and mother want to set up trusts for their children, they will set up those trusts in Delaware or Alaska, so irrespective of whether their child has a pre-nup or a post-nup, those assets are protected from a claim of a spouse,” Haranzo adds. “In the best of all worlds, for a wealthy family, we would set up an asset protection trust and we would have a pre-nuptial agreement – so that’s your belt and suspenders.”

Drawn up after a marriage takes place, post-nuptials are also increasingly being recognised by courts. “Needless to say, however, once the couple comes from the altar, chances are diminished that the owner succeeds in motivating his or her spouse to grant such an agreement,” says Luettge. However, in cases like the trusts mentioned by Haranzo, many spouses have little option but to sign.

For those who feel the romance is being killed by having to draw up an agreement or trust, then the “very minimum” they should do is get the business valued at the time of the marriage, says West. If a divorce later goes ahead, the judge is likely to take the value of the business at the start of the marriage and at the end into account when assessing the “matrimonial pot”, he adds. This means that only the appreciation of the business would be split between the couple. However, it’s worth keeping in mind that this isn’t always the case – in some countries and states, when a couple marries, all assets become each other’s property.

Without taking any of these financial steps, the family business, or at least part of it, will likely form part of the matrimonial pot. West recently had a “quite typical” case, where the wife had been given shares in the business. “The value of the company was taken into account in the settlement. We did a deal on that case, whereby he got a transfer of shares, but he had to give up lots of other assets for that benefit.”

Still, full disclosure is “advisable” during a divorce, says Higgins, adding that this can “increase the chances of a settlement being reached at the first possible opportunity” – and therefore reduce overall costs. But Anglo-Greek shipping magnate Nick Lykiardopulo must not have paid attention to such advice. His ex-wife Sally accused him of trying to divest himself of his interests in the family’s shipping business Lykiardopulo and Co, in a bid to conceal his wealth and reduce the divorce settlement. The British judge agreed, labelling his behaviour disgraceful – and Sally got £20 million (€24.2 million) in settlement.

Another option, when it comes down to dividing assets, is mediation. Lawyers are tasked with getting the best result for their client – but “the more that person gets, the less there is for others”, says Lansky. A mediator, in contrast, is “looking for benefit for all parties” – and this usually offers “the best outcome for all”. “But if the parties were able to do that, then they might not be getting divorced at all,” he adds.

Putting aside the business side of a divorce, there is the emotional impact to consider. “Even if ownership is not affected, divorce proceedings themselves can be very distracting to people and can have a harmful effect,” says Lansky. But family members, he adds, should avoid taking sides and try to maintain relationships – after all, they may still have to see the former spouse in the future, particularly if there are children involved. “Make an effort to treat everybody fairly, remembering that mum is always going to be mum, dad is always going to be dad, grandad is always going to be grandad,” he says. “Families need to remember that the children of a [divorced couple] will continue to be the one’s children, grandchildren and nieces and nephews, even after the divorce.”

Having the right balance between relationships and the business is really important, says Luca Nugo, the second-generation chief executive of PMT Italia, a paper machinery company turning over about €100 million. He counts himself lucky – his divorce “wasn’t difficult”. “Of course there was an impact, but in the end, it was not a big problem for the business.” This was partly because the couple still got along – “I had and have a good relationship with my ex-wife” – and she had never been involved in the business and they didn’t have any children. But he admits he struggled to get the balance right. He and his wife divorced around the time he was becoming chief executive. “I was the one who was going to lead the business and this was taking up a lot of my time. I was concentrating on this business and this affected [my relationship]”. Speaking from experience, Nugo believes “it’s really important to have a good balance, the right balance, between the family and the business”.

If a divorce is to go ahead, his advice is simple: “As much as possible, keep the business separate from the family. Of course, the family will be involved in the business, but you really have to try and protect the business from outside issues, like divorce, and similarly, you need to protect the family from business issues.”

And for those planning to get married this year, the message is clear: don’t kill the golden goose. “We might all think we are invulnerable, but we are all vulnerable to divorce,” says Lansky. “My advice is: are you sure you want to get married?”